How many units would have to be sold to yield a target operating income of $ 24 comma 000, assuming variable costs are $ 28 per unit, total fixed costs are $ 4 comma 000, and the unit selling price is $ 33? A. 5 comma 600 units B. 800 units C. 1 comma 000 units D. 1 comma 218 units

A. 5 comma 600 units

Explanation:

The profit is a function of the sales and cost of an organization. The cost elements are in two groups namely; Fixed cost and variable cost. The variable cost is a function of the level of activities.

Given;

Targeted income = $24,000

Variable cost per unit = $28

Total fixed cost = $4,000

Unit selling price = $33

Let the number of units be u

33u - (28u + 4000) = 24000

5u = 28000

u = 5600

The right answer is A. 5 comma 600 units

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